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Canadian farmers worry about rail capacity

There are industry concerns that Western Canada’s rail system may not have sufficient capacity remaining to handle a major third-quarter export program by the Canadian Wheat Board. The shortage of railway capacity, or weather-related closures at one of Canada’s two major railways could disrupt a major export program.

This years’ crop, which is being harvested two weeks late due to wet weather, is one of the largest in five years. Shippers are worried that the necessary capacity at the two major railways, CN Rail and CPR, may have been absorbed by growing shipments of containers and resource traffic. While the CWB does not reveal details of its export programs, Maureen Fitzhenry, board spokesperson, did confirm that a major export program is planned for October, November and December.

The word on the street is that more than 750,000 tons of grain are scheduled to move through the Port of Vancouver the first two weeks in October

Fran Malecha, Sr. Vice-President of Saskatchewan Wheat Pool’s grains group, said his company is concerned about how the transportation logistics system will perform, and whether sufficient grain cars will be available.

“There’s roughly 24,000 cars in the fleet,” he said. “It’s about equal between both railways.

“From our view, there’s enough hopper cars to move the crop. It’s a matter of how efficiently we move those cars and turn them from country origins to port facilities,” Malecha said.

“We really haven’t increased the velocity of the fleet despite the addition of a number of 150-car loading elevators in Western Canada,” he said.

Malecha said that even though CPR has recently spent C$160 million to increase the capacity of its line between Moose Jaw, Saskatchewan, and Vancouver, there is still a need to establish a “scorecard” with the railways to measure how grain cars are spotted in the country, how quickly they move to port and how quickly they are turned around.

“I think the first step is to establish a score card that will lead to continuous improvement and if part of that is a financial penalty or incentives, then those are the discussions we’d like to have with the railways,” he said.